Is Daylighting Still Cost-Effective in the LED Era?

Twenty years ago, daylighting was regarded as one of the most promising avenues to reduce energy consumption in office buildings—but it never took off. Now, with highly efficient LED lighting taking office buildings by storm, it might seem that the market window for daylighting retrofits has permanently closed.

However, as shown in this post, daylight harvesting lighting controls can still be cost-effective in a substantial fraction of office building floor area well into the next decade.

On the other hand, daylight harvesting lighting controls will never be more cost-effective than they were in the fluorescent era. So, penetration will likely remain stagnant unless something changes—and that something is the emergence of cost-effectiveness automated shading technology capable of responsive daylight control.

The Case for Daylighting

In its broadest sense, daylighting is a strategy for illuminating interior spaces that attempts to maximize the ratio of natural to artificial illumination. Daylighting can provide a healthier, more pleasant, and more productive visual environment while also saving energy.

Daylighting can save energy because it reduces the need for artificial lighting. But to actually realize those savings, the lights have to be dimmed or turned off when less artificial illumination is needed—and that’s called Daylight harvesting.

Daylight harvesting works in any type of building, but is especially attractive in office buildings because they have a relatively high installed Lighting Power Density (LPD) and plenty of windowed area.

Daylight harvesting can be as simple as manually switching off the lights when there is plenty of daylight and switching them on again when there isn’t; unfortunately, that just doesn’t happen in the real world. Therefore, daylight harvesting usually refers to automatic dimming of the lights using a daylight-harvesting lighting control.

Daylight harvesting first became a hot topic in the aftermath of the first energy crisis in the early 1970’s.  Back then, lighting was dominated by relatively inefficient T12 fluorescent bulbs (in commercial buildings) and even less-efficient incandescent bulbs (in residential buildings).  There were two motivations for the interest in daylighting:

• Reduction in lighting energy consumption due to reduced need for artificial illumination.
• Reduction in HVAC energy consumption in warmer climates, due to the fact that daylight has less heat per lumen than the light produced by incandescent or fluorescent lamps.

In fact, studies performed in the 1980’s and 1990’s showed that daylighting could save as much as half of the lighting energy, along with a significant reduction in the HVAC energy, under favorable conditions.  Since about one-third of commercial floor area is close enough to a window to benefit from daylighting, the projected aggregate savings were enormous.

Just as importantly, by the early 1990’s, daylight-harvesting lighting technology was becoming  mature and inexpensive enough for mainstream use.

And yet daylighting never took off.

Daylight Harvesting’s Paltry Market Penetration

The best source of information on the market penetration of various technologies in office buildings is the Commercial Buildings Energy Consumption Survey (CBECS).  The CBECS is conducted periodically by the Energy Information Administration (EIA) and documents energy-related building characteristics and energy usage data for U.S. commercial buildings.

The most recent CBECS was performed in 2018, while the preceding survey was done in 2012.

Here’s a snapshot of some of the data from those two surveys, showing the change in the percentages of the number of office buildings equipped with various lighting technologies from 2012 to 2018:

Daylight harvesting differs from the other technologies in one very important respect: it makes sense only in a building’s perimeter zone (or under a skylight).  Therefore, to provide an apples-to-apples comparison of technology penetration, the Y-axis percentage of Figure 1 is based on the number of  office buildings—and not the aggregate floor area—in which each technology is installed.

Note that daylight harvesting has only a fraction of the penetration of the other technologies, and it’s the only technology whose usage actually seems to have decreased between the two surveys.  That apparent decrease is probably within the margin of error, but it certainly seems that daylight harvesting has plateaued at only about 2 percent.

Compare that to the 20 percent penetration of occupancy sensing.  Occupancy sensing makes for a particularly apt comparison to daylight harvesting because the technologies matured at about the same time, have a comparable energy-saving potential, and have about the same installed cost per square foot.

So why is there an order-of-magnitude difference in the penetration?

Daylighting’s Achilles Heel

Surveys of building operators and other stakeholders have identified the most likely reason that daylighting hasn’t caught on: there is a widespread belief that the actual energy savings often fall far short of the promised savings.  And, like many beliefs, this one turns out to be mostly true.

However, the problem isn’t with daylight-harvesting per se—the problem is that there isn’t enough daylight  to harvest.

Most of the potentially daylit space in U.S. buildings is side-lit with eye-level view windows, and view windows must be shaded to control occasional glare.

Unfortunately, manually operated window coverings are typically adjusted less than once per day, and window coverings on sunny windows are typically left in a mostly closed position. The implication is that they’re adjusted to block glare under worst-case conditions, and then left in the same position even when the risk of glare has abated. This reduces the average amount of glare-free daylight by about 50% relative to what would be possible if the shades were always optimally adjusted.

This might suggest that the savings from daylight harvesting might also be only about 50% of what would be possible without over-shaded windows, and in fact that seems to be true.

According to a 2005 study—perhaps the most comprehensive study ever of the actual, real-world savings provided by daylight-harvesting lighting controls in side-lit spaces—the average relative savings in lighting energy were 3.59 Full-Load-Hours (FLH) in side-lit spaces without manually operated blinds, but only 1.84 FLH in spaces with manually operated blinds (“Sidelighting Photocontrols Field Study” 2005, Appendix F, Table of Full Load Hour Savings, Category “window controls”). Thus, the spaces with blinds were providing only about 50% of the energy savings of the spaces without blinds. Further, these statistics actually imply a much greater savings loss due to over-shading, because only the windows that received little sunlight were likely to be without blinds.

Since it’s not reasonable to expect people to manually adjust their shading throughout the day, the only solution is window shading that self-adjusts to maintain a desired level of glare-free daylight. We call this responsive daylight control and address it thoroughly in a separate post.

Unfortunately, responsive daylight control is far more challenging to implement with today’s technology than daylight harvesting, and its use is virtually non-existent in today’s buildings. The lack of cost-effective responsive daylight control is undoubtedly one of the reasons daylight harvesting never took off.

Has the Window Already Closed for Daylighting?

Another thing in common between occupancy sensing and daylight harvesting is that the absolute savings (in kWh or dollars) depend on the inefficiency of the lamps.  The more efficient the lamp technology, the less the savings from occupancy sensing or daylight harvesting.

This begs an obvious question: if daylighting couldn’t establish a market foothold in the heyday of inefficient T12 fluorescent bulbs, what chance does it have in today’s LED era?  In other words, has the window of market opportunity for daylighting permanently closed?

To answer that question, we’ll start with the most recent independent assessment of daylight harvesting in U.S. office buildings (done by the GSA back in 2013), and extrapolate those results to today and beyond.

GSA’s Assessment of Daylight Harvesting Technology

For many years, the U.S. Government Services Administration (GSA) administered a Green Proving Ground (GPG) program aimed at evaluating emerging energy-efficient technologies in operating federal buildings (although the current status of the program is unclear).

GPG-015 (completed in 2013) assessed daylight harvesting in five operating federal buildings, as described in the following documents:

• A 4-page brief summarizing the overall assessment (GPG-015, 2014)
• A detailed technical report (Robinson et al, 2013)

These documents provide the most detailed independent technical information on the cost-effectiveness of daylight harvesting in U.S. office buildings available in the public domain.

Here’s what the GSA said back in 2013 about sites where daylight harvesting (which they refer to as Integrated Daylighting Systems, or IDS) could be expected to be cost-effective:

“…a rule of thumb for sites where IDS should be considered is an installed LPD of higher than 1.1 Watts per square foot and a lighting EUI of approximately 3.3 kilowatt-hour per square foot or higher, although the analysis of site results indicates significant variation on this (one site is estimated to be cost effective at a pre-retrofit EUI of 2.67 kilowatt-hours per square foot). For whole-building modernization and new construction projects, the costs associated with implementing IDS would be lower due to the incremental cost increase of including IDS in an advanced, integrated lighting control system. Furthermore, as the market for advanced controls matures, it is anticipated that the cost of materials and labor will reduce. Consequently, IDS should be considered for implementation in all future new GSA buildings” (Robinson et al, page 102; emphasis on Lighting EUI added for purposes of this post).

GSA’s rule-of-thumb of a Lighting EUI (LEUI) of no less than 3.3 kWh/ft² was based the following additional key assumptions:

• A payback period of no greater than 10 years (Robinson et al, page 101)
• An electricity rate of $0.10/kWh (GPG-015, page 3)
• A daylight harvesting installed price of $1.40/ft2 (GPG-015, page 3)

A target payback period of no less than 10 years is still a valid cost-effectiveness threshold for today’s market. However, the LEUI, electricity rates, and daylight-harvesting prices have changed significantly since GSA’s assessment.

Trends in Lighting Energy Use Intensity

The market penetration of high-efficiency LED lighting has been so rapid—and it takes so long to survey the characteristics of the building stock—that there’s no way of knowing the exact average current LEUI in office buildings. However, we can make a pretty good guess by extrapolating historical LEUI data from the CBECS, and we can use the same approach to predict the future LEUI.

The following figure shows the office building LEUI from the past three CBECS, along with an exponential curve fit extended out to 2040:

The curve fit suggests a 2025 average LEUI of 1.2 kWh/ft², which is only 36% of the 3.3 kWh/ft² cost-effectiveness threshold suggested by GSA—and the projected LEUIs in 2030 and 2035 are just 0.84 and 0.57 kWh/ft² respectively.

Fortunately for daylight harvesting, many buildings will have a higher LEUI than the average.

Unfortunately, the 2018 CBECS didn’t provide any information on the distribution of LEUI in office buildings, but it did provide the 25th percentile, 50th percentile (i.e. the median), and 75th percentile of the overall electricity (not just the lighting) EUI in office buildings. We can use those data points to infer the Cumulative Distribution Function (CDF) of the overall electricity EUI.

Some research suggests that the overall electricity EUI in buildings has a lognormal distribution. However, a normal distribution fits this CBECS data far better than a lognormal distribution, and yields the following CDF:

For the purposes of this analysis, it’s reasonable to assume that the distribution of the lighting EUI would have the same shape (i.e. the same coefficient of variation) as that of the overall electricity EUI.

It’s also reasonable to assume that, as the mean LEUI continues to decrease (as shown in Figure 51), the standard deviation of the distribution would also decrease—so that the coefficient of variation would remain essentially unchanged.

Based on these assumptions, we get the following CDFs from the median extrapolated LEUIs shown in Figure 5 for 2025, 2030, and 2035:

The Y-axis of Figure 7 can be interpreted as either the probability that a given office building will have a lighting EUI no greater than the X coordinate, or as the percentage of floor area over the entire stock of office buildings in which the lighting EUI will be no greater than the X coordinate.

For example, in 2025, the median (0.5 on the Y-axis) lighting EUI is about 1.2 kWh/ft2, which we already knew from the trend curve of Figure 5. However, this Figure 7 curve also tells us that about 37% of the office building floor area still had a lighting EUI of at least 1.5 kWh/ft2 (we get that by subtracting the probability at 1.5 kWh/ft2, which is about 0.63, from 1.0).

But by 2030, we can expect that only about 12% of the floor area will have a lighting EUI greater than 1.5 kWh/ft2. And by 2035, only 1% of the floor area will have a lighting EUI greater than 1.5 kWh/ft2.

We’ll come back to these LEUI CDF curves later.

Electricity Price

GSA assumed a retail electricity price of $0.10 per kWh in their 2013 assessment of daylight harvesting technology. Fortunately for daylight harvesting’s cost-effectiveness, the price has gone up since then—but not dramatically so.

The U.S. Energy Information Administration (EIA) tracks the year-round average retail price of electricity to various purchaser sectors. Here’s the EIA data for the years 2013 through 2024 for the commercial sector, along with a linear trend-line out to 2035:

The data indicates a price of 12.6 cents per kWh for 2025, while the trend suggests prices of 13 and 14 cents per kWh in 2030 and 2035, respectively.

Daylight Harvesting Price

GSA assumed a cost-effective daylight harvesting price no greater than $1.40/ft² in their 2013 assessment. Fortunately, daylight harvesting costs have declined significantly since 2013.

In 2020, the Northwest Energy Efficiency Alliance (NEEA) commissioned a study by Energy Solutions of Oakland, CA to assess the incremental costs of Luminaire Level Lighting Controls (LLLC). LLLC, as defined by the Energy Solutions, includes not just photocells for daylight harvesting, but also high-end trim, dimming, and occupancy sensing. Energy Solutions defined three levels of LLC as part of their cost survey:

• “Clever” LLLC systems provide high-end trim, dimming, occupancy sensing, and photocells and have “plug and play” fixtures which require little or no additional programming costs upon installation.
• “Smart” LLCL systems include all “clever” capabilities but can also analyze and communicate energy and non-energy data to inform decision-making.
• “Clever-Hybrid” systems that fall between smart and clever: they include a standalone gateway and provide additional functionality such as energy monitoring yet lack the full IoT capabilities of a smart system.

The Clever systems offer the fewest additional capabilities beyond daylight harvesting, but are also the least expensive and therefore also the most cost-effective for daylight harvesting. The following discussion is therefore limited to the Clever systems.

Average “Clever” System Prices

The Energy Solutions report linked above quotes daylight harvesting prices on a per-fixture and per-project basis, not on a per-square-foot basis as referenced in the GSA assessment. The report does provide enough information to estimate the per-square-foot price, but it takes a bit of work to do that.

Fortunately, Craig DiLouie has already done that work and provided the results in a blog post at the Lighting Controls Association website. Based on the 2020 Energy Solutions data, he came up with an incremental price of $0.58/ft2 for Clever daylight harvesting systems.

This is only about 40% of the $1.40/ft² quoted by GSA in their 2013 assessment of daylight harvesting. This steep drop is partly due to the fact that the GSA price assumed fluorescent lighting with a centralized lighting controller, whereas the Energy Solutions prices are for LED lighting with less-expensive fixture-integrated controls.

The Energy Solutions report linked above provides Clever system prices for the years 2017 through 2020. Plotting those prices along with the 2013 GSA price yields the following trend:

This extrapolated trend seems reasonable, but there are a few reasons to believe that it might be optimistic:

• The 2013 GSA data point was based on a different (and more expensive) technology.
• LLLC lighting was so new in 2017 that it was on the steepest initial part of its cost-improvement curve.
• The COVID-19 pandemic probably perturbed the price trend in some way.

So, for the sake of conservatism, this analysis assumes that future higher prices will be a bit higher than suggested by the trend, as shown in the figure.

Projected Daylight Harvesting Payback Periods

Based on GSA’s 2013 threshold lighting EUI of 3.3 kWh/ft2 for a 10-year payback, the extrapolated retail electricity and daylight-harvesting prices shown above are all that’s needed to convert the LEUI CDFs of Figure 7 into daylight-harvesting payback CDFs.

However, because there is more uncertainty in the daylight-harvesting price extrapolation of Figure 9 than in the other variables, this analysis estimates the payback CDFs for two different scenarios:

• Scenario 1: daylight-harvesting price fixed at the 2020 estimate of $0.58 per ft2.
• Scenario 2: daylight-harvesting prices declining over time per the assumed prices of Figure 9.

Scenario 1: Fixed Daylight Harvesting Prices

Assuming a fixed daylight-harvesting price of $0.58 per ft2 yielded the following payback period CDFs:

The curves of Figure 10 suggest that current daylight harvesting technology could provide a payback period of 10 years or less in 56% percent of U.S. office building floorspace in 2025, 30% in 2030, and just 16% in 2035.

Despite the fact that even just 16% of the aggregate floor area in U.S. office buildings is still a lot of square feet, these curves clearly suggest that the market window for daylight harvesting is closing fast—but only under the assumption that the price of daylight harvesting remains fixed.

Scenario 2: Declining Daylight Harvesting Prices

Using the extrapolated price assumptions of Figure 9 instead of a fixed $0.58/ft2 price for daylight harvesting yields the following payback period CDFs:

This is obviously a much more promising scenario for daylight harvesting because it suggests that the market window is actually closing relatively slowly: the floor area for a threshold payback period of 10 years is an impressive 71% in 2025, and it drops only modestly to 64% by 2035.

While the Window’s Still Open, the Challenges Remain

While Figure 10 suggests that daylight harvesting can still provide a payback period of no greater than 10 years over a substantial amount of floorspace, that 10-year payback isn’t any shorter than it was in 2018 when the CBECS found just a 2% penetration.

So, if daylight harvesting’s market penetration stalled in the fluorescent era, why would it accelerate in the LED era?

It wouldn’t—unless at least one of two things happens:

• Further dramatic reductions in effective price. This could happen if the non-daylighting benefits of smart networked lighting are recognized as being compelling enough to drive deep market penetration; in that case, the incremental cost of adding daylight harvesting could be much lower than the $0.58/ft² assumed in Figure10.
• Broad use of responsive daylight control technology. This would significantly increase the average amount of glare-free natural illumination in side-lit spaces, potentially doubling the average savings from daylight harvesting. Unfortunately, responsive daylight control technology is currently much more expensive than daylight harvesting. Fortunately, as explained in our dedicated post on responsive daylight control, it also provides other benefits that are actually more valuable than the energy savings from daylight harvesting:
  • It can reduce loads on the HVAC system. In buildings with efficient LED lighting, these HVAC savings can be greater than the lighting savings from daylight harvesting.
  • It can provide a healthier and more productive visual environment. The resulting economic benefits are arguably far more valuable than any energy savings.

Unfortunately, both of these things would require a cultural shift regarding investments in building technologies, namely an increased appreciation of the non-daylighting benefits of (1) smart networked lighting, and (2) responsive daylight control, respectively.

References

Alastair Robinson, Claudine Custodio, and Stephen Selkowitz. “Integrated Daylighting Systems.” Prepared for the U.S. General Services Administration by the Lawrence Berkeley National Laboratory. March 2013. <https://www.gsa.gov/system/files/GPG_IDS_Report_Final_508_Compliant.pdf>

Craig DiLouie. “NEEA Report: Luminaire-Level Lighting Control Costs Decline.” April 2021. <https://lightingcontrolsassociation.org/2021/04/23/luminaire-level-lighting-control-costs-decline/>

General Services Administration, “GPG-015 July 2014: Integrated Daylighting Systems.” <https://www.gsa.gov/system/files/GPG_Findings_015-Integrated_Daylighting.pdf>

Heschong Mahone Group, Inc. “Sidelighting Photocontrols Field Study”. Report prepared for the Northwest Energy Efficiency Alliance, Pacific Gas and Electric Company, and Southern California Edison Company. 2005. <Sidelighting-Photocontrols-Field-Study>

Teddy Kisch and Kate DoVale. “2020 Luminaire Level Lighting Controls Incremental Cost Study.” Report #E21-415, prepared for the Northwest Energy Efficiency Alliance (NEEA) by Energy Solutions. January 7, 2021. <https://neea.org/img/documents/2020-LLLC-Incremental-Cost-Study.pdf>